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The FTSE 100 in the UK saw a very modest increase on Wednesday, supported by recovering bank shares, with contributions from the aerospace and defence sectors as well, following U.S. President-elect Donald Trump's call for increased spending from NATO partners. The blue-chip index climbed by 0.2%. Yields on British government bonds remained at high levels, with the 10-year note's yield close to its peak in over a year. Gilt yields have increased in recent weeks as most investors anticipate that the Bank of England will reduce interest rates by only about half a percentage point this year, while inflation is expected to stay above the central bank's 2% target. Banks provided significant support for the FTSE 100, gaining 1.7% following a decline of over 1% in the previous session. HSBC increased by 1.8%, reaching its highest level since 2008, while Barclays rose by 2.5%. The aerospace and defence sector also saw a boost, climbing by 1.4%, with companies such as Rolls-Royce and BAE Systems benefiting from U.S. President-elect Donald Trump's call for increased spending from NATO allies. However, Shell's performance limited the index's gains, as its shares fell by 1.4% following a revision of its liquefied natural gas production forecast for the fourth quarter and indications that its oil and gas trading results are likely to be significantly lower than in the previous three months.

Single Stock Stories:

• London-listed shares of Flutter Entertainment dropped as much as 4.8% following the company's announcement that it expects 2024 earnings from its rapidly growing U.S. brand, FanDuel, to be significantly lower. This is attributed to an unprecedented winning streak enjoyed by American football gamblers. Flutter estimates that U.S. revenue will be approximately $370 million below its previous guidance midpoint of about $5.78 billion. Additionally, the company projects that U.S. adjusted earnings will be about $205 million lower than its earlier guidance midpoint of approximately $505 million. In response to Flutter's news, shares of rival Entain, which operates a joint venture with MGM Resorts in the U.S., fell by about 2%. Despite the recent decline, Flutter's stock has gained 49% in 2024.

• Shares of Britain's Topps Tiles rose by 2.7% to 39.5p after the company reported a 3.5% increase in like-for-like sales for the first quarter. The tile retailer also posted group sales for Q1 that were up 4.6%. Additionally, Topps Tiles announced the retirement of CEO Rob Parker, who will remain in his position until a successor is appointed, with the new CEO expected to be announced towards the end of 2025. Despite the recent gains, the stock has dropped approximately 22% in 2024.

Broker Updates:

• Shares of Hochschild Mining fell by 2.8%, making it one of the top losers on the FTSE midcap index. Berenberg has revised its price target for the company down to 240p from 250p while maintaining a 'hold' rating. The brokerage anticipates that production in 2024 will be around 344,000 ounces of gold equivalent (AuEq), which is at the lower end of the company’s guidance of 343,000 to 360,000 AuEq. It also expects all-in sustaining costs for the fiscal year to be $1,531 per ounce, higher than the company's guidance of $1,510 to $1,550 per ounce, mainly due to elevated costs at Mara Rosa during its ramp-up phase. Berenberg noted that performance risks persist at Mara Rosa as it approaches its first wet season (November to March), which they believe introduces some moderate downside risk. Despite the recent decline, Hochschild Mining shares have risen approximately 106% in 2024..

Technical & Trade View

FTSE Bias: Bullish Above Bearish below 8225

• Primary support 8000
• Below 8000 opens 7855
• Primary objective 8600
• Daily VWAP Bullish
• Weekly VWAP Bullish

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